What is Business Insurance? Types and Benefits
You finished almost all of the required tasks for successfully starting your business and working hard for the sales to come, everything is running fair and well, and then suddenly you face a situation where you lose some of your goods or a circumstance that leads you to major loss of your business, or physical damage. In such instances, having Business Insurance is beneficial for every business owner, small or large. It protects you while facing any loss due to unforeseen events. Let us understand the types and benefits of Business Insurance.
What is Business Insurance?
According to its literal definition, ‘Business Insurance refers broadly to a class of insurance coverage intended for purchase by businesses rather than individuals. Businesses seek insurance to cover potential damage to property, to protect from a lawsuit, or contract disputes. Valid Business insurance can save an owner, or businesses from suffering major losses, thereby eliminating the threat at some point.
Types of Business Insurance
Business insurance varies, according to the damage covered or the nature of your business. In India, Business Insurance is not a compulsion or a mandatory step to be taken, but it is always necessary to have your Business insured from any unforeseen events. Most of the small businesses have some of the types of Insurance that are commonly seen to be done. Various types of Business Insurance are as follows.
1. General Liability Insurance
Considered as one of the most basic and important types of Business Insurance that every business should have, is General Liability Insurance. General Liability Insurance helps businesses to protect their assets in the event of getting sued by a third-party. Various claims covered by this policy are Bodily injuries, False Advertisement, Property damages, and so on. It also covers the legal costs, fees, and settlement fine or rewards. One of the major reasons why you should definitely avail this insurance is that it would help you cover the high legal fees.
2. Professional Liability Insurance
A more advanced version of General Liability Insurance is the Professional Liability Insurance. One of the benefits of this type of insurance is that it covers all the legal fees, settlements fees filed by customers or clients. They also help with claims such as negligence, inaccurate advice, misrepresentation, and violations of good faith. Many types of professionals also opt for this type of insurance such as Doctors, Advisors, Architects, Insurance agents, and so on.
3. Employee Insurance Policies
This type of Insurance is mainly focused on any injury, illness, damage caused to the Employees of your business. Such insurance is helpful for the employees, especially for their families in the event of the employee’s death. Employee Insurance policy is also called as Worker’s Compensation Plan, though there are no major guidelines of making this policy mandatory for all business, it is always recommended to avail this insurance for the benefit of your employees. This insurance also covers, Retraining Costs, Replacement Income, Living costs for Permanent Disabilities, Survival benefits in case of death, and so on.
4. Property Insurance Policies
There are many Insurance Policies that is in regard to the damage incurred with respect to the property, or land, warehouse, or your business place. Many Property Insurance policies also cover the loss of Inventory, furniture, office equipment, designs, and so on. This can be very helpful, just like more cases, how a fire broke out can damage the entire building or your property, in event of Property Insurance, the repairs can be taken care of and the losses of equipment and the damage to property is also covered.
5. Business Owner’s Policy (BOP)
What if there is a policy that almost covers all of the above Insurance policies together? Business Owner’s Policy or BOP is a type of Insurance policy that acts as an Insurance package. It is described as a bundle of various Insurance policies. BOP is an ideal type of Insurance policy, especially for Small business’s as it covers almost all the policies that a small business owner may require.
BOP can have all types of policy, according to the various plans it offers and the various needs a small business has for Insurance, the policy of BOP depends on the above terms. It is the best option, as it is also cost-effective for a policyholder or the business owner.
6. Other type of Insurance
The above policies were the major ones that are opted for by the Business owners. There are some other policies that also exists and are preferred by businesses according to their industry and work.
A. Vehicle Insurance
In case your business requires a car for handling some part of the daily activity, then it should be insured. In India, it is already mandatory for all vehicles to have insurance.
B. Business Interruption Insurance
Business Interruption Insurance is a type of Insurance that works if a business is unable to perform its day-to-day activities or sales because of some calamity, or some issues.
Benefits of Business Insurance Policies
From understanding the above types of Policies, we already know the benefits that we can derive from opting for such policies. Below are the highlighted benefits.
1. Getting your business and inventory Insured
If you opt for Property Insurance, you never have to worry about losing your property or the inventory, and furniture in your office in an event of a calamity, It is all protected and paid for.
2. Attracting Clients
For businesses that deal with clients, your clients are well aware of the insurance policies and the damages that a business can have. Hence, even clients prefer businesses that have good insurance policies opted for.
3. Employees Trust and sense of belonging
With the Employees’ Insurance policies, you can get your employees insured and earn their trust and create a sense of belonging in your business environment. This in turn would help you get their utmost dedication and sincerity in their work.
Business Insurance policies are not mandatory but necessary for all types of businesses. A few of the important Business policies are Property Insurance Policy, General Liability Insurance, Professional Liability Insurance, BOP, and so on. Acquiring Business Insurance policies can help you protect your business from claims, damages, losses, and so on.